Confronting Capitalism: Will Trump Fix Manufacturing?
Mar 12, 2025
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The discussion tackles the complexities of state-led industrial policy and its role in reshoring American manufacturing. It contrasts Trump's tariff strategies with Biden's efforts to boost high-tech industries. Historical successes in industrial policies from countries like Japan and France are highlighted, along with the political obstacles of implementing such strategies. The podcast also critiques the CHIPS Act and its bureaucratic hurdles. Ultimately, it calls for empowering workers and forging a left-wing movement for transformative economic policies.
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Quick takeaways
Trump’s approach to manufacturing emphasizes tariffs over subsidies, highlighting a debate on state-led industrial policy effectiveness in the U.S.
Successful industrial policies, like those in Japan and France, require strong state capacity and political backing, crucial for overcoming U.S. bureaucratic challenges.
Deep dives
Understanding Industrial Policy
Industrial policy represents a specific form of state intervention aimed at influencing economic sectors more directly than typical macroeconomic management practices. It differs from general management of interest rates or money supply, as it targets specific industries or firms, such as the auto or steel sectors. This type of policy has not been a common feature in advanced economies, especially in the United States, which has not applied explicit sectoral guidance in manufacturing for decades. Instead, emerging economies have utilized industrial policies, which raises questions about the effectiveness and political feasibility of adopting similar approaches in more developed regions like the U.S.
Challenges of Implementing Industrial Policy
The political landscape in the U.S. poses challenges for implementing effective industrial policies, as these generally require strong state capacity and political backing for agencies charged with execution. Case studies show that successful industrial policies, such as those in Japan and France post-World War II, involved governments with a clear vision and centralized power to implement long-term plans. In contrast, the U.S. often struggles with bureaucratic hurdles, insufficient expertise, and lack of commitment from both policymakers and the business community. This creates a scenario where well-meaning policies, like the CHIPS Act, may fail to deliver meaningful outcomes due to fragmented implementation and lack of political will.
The Role of Capital in Economic Development
Capitalists may resist government-driven policies that attempt to redefine their investment priorities, preferring autonomy in making decisions aligned with their interests. Industrial policies that merely provide support for investments that firms already wish to make are more likely to be accepted compared to ones that require capitalists to change their established direction. The necessity for governments to not only incentivize investment but also impose conditions on how that investment should be employed complicates the relationship between the state and capital. Effective industrial policy thus requires a delicate balance of fostering investment while ensuring compliance with broader economic goals dictated by state interests.
The Future of U.S. Economic Policy
The prospects for re-industrialization in the U.S. face significant challenges as structural shifts in the global economy point towards a reduction in manufacturing jobs and a rise in service sector employment. While manufacturing still contributes significantly to GDP, the transition away from traditional manufacturing roles affects worker bargaining power and union representation. The political crisis within the left highlights a need to focus on worker organization rather than merely striving for industrial policy. By advocating for increased public investment rather than continuing reliance on private investment, there lies a potential pathway toward addressing employment needs and revitalizing worker organization against the backdrop of a changing economic landscape.
Donald Trump has made restoring American industry a priority across his administrations. But rather than continue Biden’s efforts to bolster domestic manufacturing through subsidies, Trump has instituted a series of tariffs intended to reshore former pillar industries and improve US trade balance.
In this episode of Confronting Capitalism, Catalyst editor Vivek Chibber and Jacobin contributor Melissa Naschek explore the promises and limits of a state-led industrial growth strategy. While industrial policy has led to success stories around the globe, implementation is often easier said than done when capitalists oppose it.
Confronting Capitalism with Vivek Chibber is produced by Catalyst: A Journal of Theory and Strategy, and published by Jacobin. Music by Zonkey.
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